After relocating to St. Louis from Pittsburgh two years ago and restructuring, the Marketing Alliance, a marketer and distributor of insurance products to independent agents, has improved sales and operating profit, though its profitability has been hurt recently by stock market declines.

Timothy Klusas, who became president and chief executive in April 2005, took advantage of the move in January 2006 to consolidate sales and marketing, previously scattered around the country, into one office, creating efficiencies and increasing operating profit from $530,000 in fiscal 2005, to $1.06 million in fiscal 2006, to $1.35 million in fiscal 2007. The company will report results for fiscal 2008, which ended March 31, in late May or early June.

The move to St. Louis was largely for personal reasons. "We could put the office anywhere with a major airport because our business is national," he said. "My wife happens to be from St. Louis."

In its third quarter ended Dec. 31, the company, which trades on the pink sheets under ticker symbol MAAL and has a market cap of $9.9 million, reported a net loss of $274,163 on sales of $4.5 million, due to investment losses, compared with net profit of $156,957 on sales of $4.2 million a year earlier. But quarterly operating income was up 74 percent to $311,088 from $179,107 a year earlier.

"Operating profit is the key metric we use because that's what returns the most to our shareholders," Klusas said. "We like the trend. It shows that some of the restructuring is starting to take effect."

However, net income for fiscal 2007 was $888,032, down from $1.1 million in 2006.

Although the company has no debt and invested in large public companies, "we're now much less aggressive in our investments," Klusas said. "It was just the wrong time to be in those, and we're shifting money to other, more conservative investments."

Marketing Alliance forms agreements with insurance carriers, such as ING, AIG and MetLife, to sell their insurance products -- life insurance, annuities and long-term care insurance -- to a network of independent agents.

"If we don't sell, we don't get paid. If we sell a lot, we get paid a lot," Klusas said. The variable cost is attractive to insurance companies trying to reduce fixed costs. "It insulates them against the fluctuations in the business."

Dorothy Conway, who owns The Conway Group in St. Charles, said the Marketing Alliance gives her a greater selection of insurance products from which to choose for her clients. "I'm a standalone agency," she said, "I still have many of the companies and products I had before, but now I have many more."

Marketing Alliance has 10 employees in St. Louis and 14 in Omaha, Neb., who do back-office work, such as new business applications.

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